Test your understanding
(1). MK Ltd had two 100% subsidiaries and one 60% subsidiary. In the year ended 31 March 2014 MK Ltd sold CX Ltd, one of its 100% subsidiaries, to JN Ltd. JN Ltd has two 80% subsidiaries. JN Ltd is wholly-owned by Mr Pereta who also owns 65% of the ordinary share capital of RT Ltd. None of these companies is dormant.
How many companies are associated with CX Ltd for the year ended 31 March 2014?
(2). BG Ltd owns 20% of WF Ltd.
In what circumstances will WF Ltd be able to surrender losses to BG Ltd?
(3). State whether the following statements are true or false.
A A company can surrender any amount of trading loss to another company in a group relief group.
B A company can offset any amount of trading loss against its total profits of the previous 12 months.